New code puts a cap on telco sweet talk

Ben Grubb, Lucy Battersby, James Manning

CUSTOMER service in the telco sector may improve over the next two years, thanks to a new code governing advertising, account management and complaint handling in a sector notorious for high complaint levels.

One of the key requirements will be that, from September 2013, customers of all large telcos will receive warning messages when they have reached 50 per cent, 85 per cent and 100 per cent of their monthly allowance for calls, messages and data.

The Australian Communications and Media Authority yesterday agreed to register the industry's 2012 telecommunications consumer protection code, ending a stand-off between the two sides.

ACMA had threatened to write its own rule book if the code was too lenient and did not meet the recommendations of a recent inquiry into service.

Negotiating a satisfactory code had been a ''tense, tough battle'' between industry, consumer groups and the regulator, according to ACMA's executive manager of content and consumer, Kath Silleri.

''This code is evidence that [industry] have stepped up to the challenge,'' she said.

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''It pushes beyond where previous codes have been and probably where we thought a code could go.''

ACMA's chairman, Chris Chapman, said he was ''optimistic'' the industry would improve and that the new code ''re-empowers'' consumers.

The 102-page code was written by the peak body Communications Alliance. It will be enforced by ACMA from September 1 and progressively phased in over the next two years. Some companies already provide this service. The word ''cap'' will be banned in advertising and standard charging information must be provided, along with a concise summary of what consumers are signing up for.

Larger telcos must implement the changes by September 2013, while smaller telcos have until September 2014 to implement spend management alerts.

A new body called Communications Compliance will be funded by the industry and will monitor compliance. It will require non-compliant telcos to submit an ''action plan'' outlining how they will better perform but cannot issue fines or penalties. Instead it will report any breaches to ACMA, which can, for the first time, fine telcos for up to $250,000 in the Federal Court for breaches. And all telcos and internet providers will be covered by the code. Until now compliance has been voluntary.

ACMA estimates it will cost the industry about $54 million to put the new code into place and about $102 million annually to fulfil obligations. About $90 million of this relates to the SMS alert service.

The chief executive of Communications Alliance, John Stanton, said the code would make a material difference and ''heralds a seachange in the telco consumer experience in Australia''. ''Industry had to do something for its own sake if they were going to continue in a self-regulatory environment.

''The 2006 code was not a bad document, but there was a yawning gap in that there was no effective compliance framework,'' he said.

The chief executive of Australian Communications Consumer Action Network, Teresa Corbin, said the code was better than ever and could stimulate growth in the telco sector.

''Informed consumers are good consumers. At this point in time, consumers live in terror of big bills and live in terror of getting caught in a long-term contract,'' Ms Corbin said.

''[We] are hopeful that its adoption will result in clearer advertising, easier comparison of products, better information about contracts and better tools to help consumers avoid bill shock,'' she said.